PRESENTATION BY WOLF MARX, MANAGING DIRECTOR OF TAWANA RESOURCES NL (TAW)

“2008 World Diamond Conference Presentation”

http://www.brr.com.au/event/52323

WEDNESDAY, OCTOBER 15, 2008, 8:00 AM.

            TAW    Thank you, Nigel.

10                    Just to give you a quick update on Tawana Resources and to try and pre-empt some of James’ questions, we listed on ASX in 2001 and then on the JSE in 2005, so we dual listed on one of the first foreign companies to dual list on the JSE. We currently have just over 100 million shares on issue, some options outstanding there which are exercisable at 10 cents. This market cap

15                    slide was done before last week so that’s changed a bit and so has the share price, but this morning, the Aussie market went up 6% on opening so I’m sure this sort of figures will get back to where they were a few weeks ago.

                        James and others have given an overview of the diamond industry, so I just

20                    want to put a couple of slides that was the image from Polished Prices that James showed yesterday as well. It sort of illustrates why we are in the diamond, or in my opinion why we are in the diamond industry because at least we have a commodity that doesn’t have wild swings like these, for instance, which is nickel which of course a few years ago this at the same

25                    timeframe that Polished Prices one is on, and of course, the diamond -- I mean, the nickel people and zinc people have wild swings which you often find that mine start at the peaks and then go depressingly belly-up a few months later.

30                    Tawana projects, we are in Australia and mainly South Africa and Botswana. The Botswana projects are joint ventured to a company led by Roy Spencer who’s in the audience at the moment. The South Australian project is joint ventured with Kevin Wills’ Flinders Mines which he talked about yesterday. So I’ll concentrate mainly on the ones in South Africa that we’re doing

35                    ourselves.

                        Location wise, essentially all situated in the area between Kimberley and the Finsch Mine. We’ve got several projects there, the main one being Kareevlei which we’ve acquired a few years ago and it’s definitely our most advanced

40                    project at the moment. We’ve done a lot of drilling and bulk sampling there over the years that we’ve had it. It’s a cluster of five kimberlites and we’re concentrating on two of them called KV01 and KV02.

                        The key to this project really is the high quality of the product. It’s unusual in a

45                    worldwide context that 80% of the product is gem quality but is fairly similar to the kimberlites nearby, particularly Bellsbank fissures. We have a similar sort of product mix. We had these diamonds valued three years ago, and by independent valuers both here and South Africa, and at the time we had values of around $110 to $120 a carat. So back in August, we put them up for tender in Kimberley and we got a value of the possible there of US$169/ct. So, clearly the product has increased in value as one would expect of that time. We have a 12-year mining right there which was granted in 2007, and our focus is currently to try and do some trial mining there to get a JORC

5                      resource established. We’ve built a DMS plant which is just waiting one crusher that we still need to get to complete the plant.

                        These are some of the diamonds there, that one on the right there is a 3.7 carat stone which was valued at the…or was bid for at the tender in August,

10                    US$2,800/ct.

                        The grades that are indicated there from the work we’ve done in the past, as shown on its slide there, and the values as I say were established by Independent Valuations in the case of the KV03 and KV05 and from the

15                    tender recently on KV01 and KV02. So, the program there in the trial mining is to try and get the JORC resource on the thing and as you know, we need about 2,000 carats to get a reliable valuation for pipes like this. So the plan is to dig two little open cuts basically into the two pipes and extract 20,000 tonnes in total which should give us at the grades that were indicated in the

20                    past, at least 2,000 carat which will then be able to complete the resource statement for the thing.

                        As I’ve said, we’ve built the plant and the budget for the trial mining program is shown there in rand which is approximately, you know, it’s between, it’s

25                    about $1.8 million in total. The parameters there are indicated for if the value and the grade gets established which would show that over 0.50 million tonnes per annum, it would be quite an attractive little a cash producer of -- in grand terms of between 20 and 30 million rand per annum, depending on which part of the pit you are in.

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                        The other project that we’ve had there for awhile is an alluvial project, it’s an enormous thing, newly discovered a few years ago with the aid of BHP’s Falcon Project and also our own work with helimag and so on and this is a project that is currently in suspension because we’re looking for alluvial

35                    specialist to come and joint venture into this project. The reason for that is that in spite of the diamonds being beautiful diamonds from there and we suspect of not all come from Finsch, incidentally, but the volumes of gravels there are simply enormous. You can see there, the estimated mineralisation there in million tonnes in the various parts of the channel there are, you know,

40                    mind boggling and essentially is, you know, where do you start on doing the mining on a thing like this. It clearly needs a lot of cash to put up a sufficient size plant in there to start mining this thing and so in our view, the best way forward there is to get somebody or companies and if, various of them around in South Africa. They’re the alluvial specialists, and we’re talking to several of

45                    them.

                        Another project which I’ve mentioned last year when I was here, and that there was a bit of debate on where exactly the St. Augustine kimberlite was located, that’s been clarified in recent times in that we, last year when I was here, we had this image and we said the St. Augustine kimberlite was here and it’s an historic pipe that was mined back in the -- between 1899 and 1902 when there was a crash in the diamond prices in the mining stock. The big hole which is just next door here had the tailings put over all of those areas.

5                      Just since our last diamond conference last year, the tailings in this section here were removed by diggers with the authorization of the municipality there and that exposed kimberlite where we said it was. We’ve got a sample of that rock that we got out of the pit there in our booth, quite nice looking macrocrystic kimberlite.

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                        The southern portion here was in dispute because the surface landowner in this section here is De Beers and they’re busy building a convention centre in the southern portion here and so they obviously wanted us to, you know, make sure that we weren’t going to disrupt any of the activity there. We’ve

15                    now come to an agreement that we’ll drop the southern portion here and we’ll just concentrate more on the northern one, which is the one whereas we’ve found two gravity anomalies which looked identical to the known St. Augustine’s kimberlite pipe gravity anomalies. So these two here, we intend to drill in the very near future with the agreement with the surface owner,

20                    which is De Beers, and I think last year, I remember that (inaudible) (0:10:02) suggested that there might be another kimberlite in the section because he remembers going there with I think Barry Hawthorne or somebody years ago so this might be the -- in fact the known kimberlite, and it’s simply a rediscovery, but this certainly is a very interesting feature in itself.

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                        As I said, in Botswana, we’ve got a joint venture with Nowak which is earning 51% interest there. We’ve got a number of kimberlites, 8 kimberlites in this prospecting license up there. Our partners there are currently earning, as I said earning there, the interest there by doing bulk sampling. They’ve sunk

30                    pits, three pits into one of the kimberlites called BK24 and that’s got a DMS on site which will be starting to process some of those kimberlites in the very near future.

                        In the, just the one slide here of the Flinders Island where -- but you’ve heard

35                    the story about that yesterday from Kevin Wills. Now, the interesting, one of the other features for Tawana is that, apart from our projects which are ongoing, we have a major change of structure in our black empowerment relationship in South Africa, in that we converted the equity that our partners have in our South African projects, which was 26%. They converted that

40                    equity in the project into equity in the company, so they now have 8% of Tawana and we, as Tawana have 100% of our South African projects again. Now, what that means is that we can a) joint venture clean project like the Tawana alluvial project and give us our black empowerment partners access, obviously and exposure to all of our projects in the, you know, whether they’re

45                    in South Africa, Botswana, or Australia. What it also means is that we can sell a portion of our assets as well, so we’re currently close to finalizing an agreement where a third party is going to buy into one of our projects, Kareevlei project, which will give us the cash to do the trial mining. So in answer to your question, James, the cash position currently is obviously not sufficient to do the trial mining but it will be very shortly.

                        So that’s it. Thanks.

PRESENTATION CONCLUDED

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